Relayrides new AP will allow GM onstar users to rent their car without lending out the keys or meeting the renter.

Relayrides new AP will allow GM onstar users to rent their car...

Car-sharing service RelayRides is moving into the auto rental market at San Francisco International Airport Tuesday, even as rival FlightCar battles a lawsuit filed by the city charging that its service is illegal.

RelayRides is offering travelers free off-airport parking in exchange for letting the company rent their private vehicles while they are gone.

It is the latest example of how "sharing economy" tech companies are quickly creating competition for the existing transportation industry - and in many cases, challenging what they call outdated government regulations.

"We really have our sights set on disrupting the big players," said RelayRides spokesman Steve Webb.

The 3-year-old San Francisco company bills itself as a peer-to-peer car sharing service, using the Internet to match drivers willing to rent their cars while not in use to people seeking a vehicle for an hour, a day or a week.

With the new airport service, RelayRides is offering free parking through a deal with the Aloft San Francisco Airport hotel in Millbrae, just south of the airport. RelayRides customers will ride the hotel's shuttle to and from the airport.

Unlike the regular RelayRides service, car owners don't receive a cut of the rental fee, but they save on parking costs for the minimum three-day stay and receive a free car wash. The airport's long-term lot charges $18 per day.

For renters, "we're focused on really competitive pricing, about 40 percent cheaper than the average rental car," said Aaron Platshon, head of strategic products for RelayRides. The company can offer lower rates because it doesn't buy or maintain a fleet of rental cars.

Plans start without permit

About six weeks ago, RelayRides asked its members to show whether their cars are located near a major airport. Since then, more than 2,000 cars have been listed near 183 airports.

RelayRides revenue grew by 50 percent in June, making it the company's most successful month and providing "strong signals that airports were a big opportunity," Platshon said.

RelayRides is pushing ahead with plans to take reservations starting Tuesday and to launch service on Aug. 9 despite not having a permit from SFO. The company has contacted the airport and proposed paying the same fees charged to other rental car companies.

Airport spokesman Doug Yakel said the airport has been in contact with RelayRides and sent forms and other information needed to obtain a permit.

And RelayRides will need a permit to operate, he said. The city-run airport has already gone to court to try to stop FlightCar, which launched a similar park-and-share service in February. Like RelayRides, FlightCar also offers a free car wash and insurance, but adds a $10 pre-paid gas card if the car is rented.

FlightCar lawsuit

The airport classifies FlightCar as a rental car company that is subject to the same regulations as Hertz and Enterprise.

According to the suit, the airport collected $94 million in fees - about 10 percent of its operating budget - from rental car companies in fiscal year 2011-12. The airport charges those companies 10 percent of gross profits and a $20 fee per transaction.

'Simply more efficient'

FlightCar contends that is not a traditional car rental company, although it also says it pays the airport about 15 percent per car share arrangement because it uses a hired-car service to shuttle customers.

FlightCar bookings have increased by about 40 percent per month and it had its busiest weekend around the July Fourth holiday. The company launched service for Boston's Logan International Airport in May.

Company CEO and co-founder Rajul Zaparde said FlightCar is not "undercutting" existing car rental companies by "flouting" the airport's regulations, as the lawsuit charges.

"Our model is simply more efficient," Zaparde said. "What we're doing is completely within the law."

The case has been moved to Santa Clara County; the next court date has not been determined.

Yakel said FlightCar is also circumventing SFO's traffic reduction plan by picking up and dropping off customers at terminals instead of at the AirTrain light-rail transit system.

"There's not only a congestion management consideration, but it is also an environmental consideration as well," Yakel said.

RelayRides also says it plans curbside pickup and drop-off service. And Webb said the company doesn't plan to wait for a permit.

"We've designed this within the existing structures and we have every intention to pay the relevant fees," he said.